We are studying the mechanism by which the individual genes are excised from chromosomes during the development of the macronucleus from a micronucleus in hypotrichous ciliated protozoa. All of the DNA in the mature macronucleus consists of gene-sized molecules, and these serve for all of the transcription needed for cell maintenance and proliferation. We are studying the properties of the gene-sized DNA molecules and have shown that all of the approximately 20,000 different genes have the same inverted terminal repeat sequence consisting of 5' CCCCAAAACCCCAAAACCCC. At the 3' end all molecules possess the complementary sequence of G4T4, but this sequence is longer, forming a 16 base 3' single-stranded extension. We have begun to study the colinearity of the chromosomal (micronuclear) and macronuclear versions of individual genes. Results so far suggest that intervening sequences are removed from genes during or following excision from the chromosome. Future studies will include identification of functions of gene-sized molecules by functional cloning in yeast that are deficient in specific enzymatic functions.